If safety factors are added to a bid for a project, what is likely to happen to the bid's competitiveness?

Adding safety factors to a bid generally increases the overall cost of that bid. Safety factors are usually included to account for potential risks, unforeseen project complications, or additional safety measures. While they serve to protect the contractor from potential losses or liabilities, they also raise the bid price.

Higher bid prices can often make the bid less competitive compared to others that do not include such factors, particularly in scenarios where clients are price-sensitive or where the competition is using more aggressive pricing strategies to win contracts. Consequently, when bids are evaluated, the one with a higher price, due to additional safety factors, is less likely to be selected as the low bidder, which is often a significant aspect of the bidding process. Therefore, while including safety factors is prudent for risk management, it can negatively impact the competitiveness of the bid in terms of pricing relative to other bidders.